Dogecoin’s rare buy signals have yet to spark a rally: Here’s why
While Elon Musk’s latest interaction with a Dogecoin-related post drew attention, traders were more focused on a rare series of weekly buy signals that have yet to translate into price strength.
It was the first Dogecoin [$DOGE]-related memecoin the billionaire has liked since the biggest memecoin, $DOGE itself, Whale Insider reported on X.
Technical analyst Ali Martinez also showed that the memecoin had generated a buy signal on the weekly timeframe. The TD Sequential indicator has flashed consecutive buy signals, “a rare setup that could be warning a major bull rally is approaching”, the analyst wrote on X.
Yet, the price movement of $DOGE in recent days has been lacking. In the past 24 hours, its daily trading volume has slid by 20%, and the memecoin was flat for the day and down 0.94% over the past week. Its Open Interest had not budged, either, dropping only 1.1% in a day.
Long-term $DOGE bulls’ hopes are draining away
Source: $DOGE/$USDT on TradingView
After dropping to the $0.088 support zone in February, the bulls fought valiantly to defend it. In May, a recovery appeared to be underway. At the same time, Bitcoin [$BTC] faced rejection from its rally to $82.5k, dragging the rest of the crypto market downward.
Source: CryptoQuant
The spot taker CVD of the past three months showed that from December to late March, taker buy volumes dominated spot markets. For a few days in May, taker buy volume spiked, as Dogecoin prices tried to push beyond the $0.12 resistance zone.
The optimism has drained away since then. Taker sell dominance was not yet underway, but $DOGE itself was trading 17% below the $0.088 former support level.
What to expect from Dogecoin for now
A week ago, AMBCrypto had reported that the liquidation map made a case for a short squeeze toward $0.08. This scenario has not yet played out.
Source: $DOGE/$USDT on TradingView
The swing structure was firmly bearish. Technically, a bounce toward $0.083-$0.087, the Fibonacci golden pocket, remains possible. In the lower timeframes, the $0.075 area was a key resistance zone too.
Traders can wait for a move toward the local highs at $0.078 to begin to sell, or for a test of the golden pocket, too. Bitcoin needs to clear the $67.2k area to signal that it is ready to rally as high as $77k.
If $BTC clears this resistance, a short-term market-wide bullish sentiment shift could see a Dogecoin bounce. If $BTC faces a drop below $62.5k, the leading memecoin would be much more likely to fall to new swing lows without a meaningful bounce.
Final Summary
- Dogecoin’s lack of volatility in recent days meant that the short squeeze idea was not yet invalidated.
- Traders will need to keep an eye on Bitcoin trends to gauge if the memecoin would have the potential to rally or would head toward new swing lows next.
